While the Trump Administration has effectively blocked the Obama Administration’s plan to increase the salary standard for exempt status, its next moves are far from clear. In Nevada v. Dep’t of Labor, C.A. No. 4:16-CV-731-ALM (E.D. Tex 2017 Aug. 31, 2017), the United States District Court for the Eastern District of Texas granted summary judgment against the Department of Labor (“DOL”) in a claim challenging the Obama Administration’s proposed changes to the salary basis test required for an employee to be exempt from the Fair Labor Standards Act (“FLSA”) overtime requirement. The Obama Administration had proposed raising the minimum salary threshold for exempt status from $455 per week to $913 per week. The State of Nevada and twenty other states successfully challenged DOL’s proposed changes and ultimately succeeded in blocking their implementation. On August 31, 2017, the District Court granted summary judgment and held that the DOL’s proposed final rule regarding the salary basis test exceeded the DOL’s authority, and was therefore invalid.
On October 30, 2017, the DOL appealed the grant of summary judgment and noted that it intends to ask the Fifth Circuit Court of Appeals to hold its appeal in abeyance while it undertakes further rulemaking to determine the appropriate salary level. What, if anything, the Trump Administration will do to change the legal test for exempt status will likely be rolled out next year.
Pannone Lopes Devereaux & O’Gara attorneys will continue to provide updates on the Fair Labor Standards Act and other important employment law topics. If you or your organization have questions, please contact employment law attorney and litigator, PLDO Partner Matthew C. Reeber at 401-824-5100 or email [email protected] We welcome your comments, questions and suggestions.